Benefits of marginal gold worth the premiums?

[PeterPan]

Today I have been doing some research on marginal gold coins and their benefits, so wondered what people's thoughts were.

Buying 10 1/10oz coins still gets you an oz of gold but at a massive premium compared to a single 1oz coin. However, are the premiums acceptable given the benefits of future liquidity? 

If spot hit £5k an oz, it would be far easier to sell several 1/10 oz coins for £500 each, than a single coin for £5k.

Therefore, if holding for the long term (20+ years) does it make more sense to go fractional? Same applies to half sovereigns over full. 

Anyone here exclusively stacking fractional? Would love to hear your opinions. 

[HawkHybrid]

bullion sovereigns are one of the most liquid coins in the uk.

additionally their low premiums over spot, makes them one of the most

competitive choices for ease of selling.

for added flexibility you can keep a mixed bag.

 

HH

[JunkBond]

If you are prepared to pay a premium then somebody else will further down the line.

Fractionals should hold their premium as long as you don't just unload to a dealer.

If gold is £5k an oz you probably won't care anyway. 😂

[Tn21]

I was on the offensive for fractionals during 2018 for the reasons you stated (easier to liquidate if gold goes up drastically) but I would also go for the bigger weights aswell in order to get some weight under the belt. 

Re the fractionals just be patient and you can pick them up sometimes at good prices. Recently here on the forum as well as HGM the 1/10oz gold Brits you could get for £150 region which is not a bad price at all currently. 

Sovs as mentioned above are easy to liquidate so we'll worth getting a few of them too

[Robb]

Since fractional gold sells for a premium the logical answer would be that someone is buying fractional gold for a premium, otherwise there would be no sales at a premium.  😉

You can also purchase fractional gold at similar premiums (percentage) to the typical 1 troy oz but it does take time and patience.

The suggestion above to invest in both fractional and the larger weights is spot on.

[HawkHybrid]

36 minutes ago, Robb said:

You can also purchase fractional gold at similar premiums (percentage) to the typical 1 troy oz but it does take time and patience.

 

this highlights one of the questions about fractional coin liquidity.

do you sell at full premium to those willing to pay it? or

do you sell at a lower premium to a wider set of buyers?

 

I only get fractionals that are lucky buys. if I manage to sell them at an increased

premium then it will be a bonus. I don't wait patiently to stack fractionals or buy

them at the higher premiums.

 

HH

[Airhead]

I am looking for a little bit of advice,

What would those with greater experience than myself (ie everyone) prefer to buy; Soveriegns or 1/4 oz Britannias? I have some 1 oz Britannias so I have the weight as @Tn21 so aptly put it and a few Soveriegns but Bullion by Post is currently offering 1/4 oz Gold Standard coins for £357.90 at the quantity I am considering. The margin is roughly 8% over spot which for a fractional seems quite good? 

https://www.bullionbypost.co.uk/gold-coins/gold-standard/2020-quarter-ounce-gold-standard-25-coin/

[Shep]

@Airhead If looking to stack the most weight for the lowest premium over spot, sovereigns will always win and that’s probably what I would always pick.

That being said, buy something you would actually like to own. Sovereigns can certainly get a little dull and you wouldn’t have much of a problem selling on either of those. Much of a muchness really.

 

[Airhead]

2 minutes ago, Shep said:

@Airhead If looking to stack the most weight for the lowest premium over spot, sovereigns will always win and that’s probably what I would always pick.

That being said, buy something you would actually like to own. Sovereigns can certainly get a little dull and you wouldn’t have much of a problem selling on either. Much of a muchness really.

 

Thank you for the reply @Shep

I do like Soveriegns but the newer ones look a bit coppery to me rather than Golden so I would probably go for an older coin. You are right of course Sovs do have the best premium. One thing I noticed from the given spec is that the 1/4 oz is exactly the same diameter as a Soveriegn at 22.05mm

[PeterPan]

3 hours ago, Robb said:

Since fractional gold sells for a premium the logical answer would be that someone is buying fractional gold for a premium, otherwise there would be no sales at a premium.  😉

You can also purchase fractional gold at similar premiums (percentage) to the typical 1 troy oz but it does take time and patience.

The suggestion above to invest in both fractional and the larger weights is spot on.

Where are you able to find fractional at such lower premiums? 😲

[sixgun]

16 minutes ago, PeterPan said:

Where are you able to find fractional at such lower premiums? 😲

Generally the answer is no you cannot get fractional gold at the same premium as sovereigns. You will see them from time-to-time but not reliably, so you must be prepared to move on them quickly. i expect nearly every UK member who is serious about collecting gold has sovereigns. They are plentiful, lower premium, easy to sell, well recognised. So many points in their favour. They are the no brainer. 

[Robb]

1 hour ago, PeterPan said:

Where are you able to find fractional at such lower premiums? 😲

I've bought all my gold on Ebay.  Typically bought with a Buy it Now or Best Offer.  I don't think I've ever bid on a Gold auction.  Picked up 1/4 oz Maple Leafs for $380 USD back in October which was only $7 over spot per coin or $28/oz.  You couldn't buy a troy oz at the time for that low of a premium.  As others have said, you have to be diligent in hunting for these deals (I check Ebay several times/day) and move quickly.  Most important is to be patient.

Those GMLs were the last fractional gold I've purchased simply because I haven't found any since with low premiums.  To be honest, with prices the last few months I'm not really looking all that hard and will wait until the hysteria calms down a bit (and the prices).

I don't have a single 1 oz gold coin, but I do like my Mexican 50 peso gold which is also a nice way to purchase Gold near spot.  I think if I were to  make a substantial investment in 1+ oz gold it would be gold bars.  They have some of the lowest premiums if all you are interested in is weight.  Right now, 1/2 kilo gold bars are 1.9% over melt shipped, which is about as low a premium that I've seen.  250 gram bars have just a bit more premium and might be the sweet spot for investors without deep pockets.

[Melon]

If you're patient the deals do pop up occasionally on fractional coins. On black friday last year for example HGM put everything to 1% premium. 

 

[Metalisreal]

I'm currently working with a tax relief entity due to a debt to the US IRS. Unless I can scrap up the cash somehow for a full oz of gold it's fractional gold for me. I think that much money to order a full oz online may set off a "red flag" as the IRS thinks I should be paying them instead of buying gold.

[PeterPan]

On 06/06/2020 at 03:01, Melon said:

If you're patient the deals do pop up occasionally on fractional coins. On black friday last year for example HGM put everything to 1% premium. 

 

Damn! Do they do that every year? 

[Melon]

3 minutes ago, PeterPan said:

Damn! Do they do that every year? 

No guarantees no, they sold out and I wouldn't necessarily hold out for it, but patience is key with fractional stuff in my opinion!